Note: This is a chapter in my new ebook called The Ultimate Guide to Buying (and then Selling) Your First Home. I will post a chapter a week. If you like what you read, you can pick up a copy here for the price of a candy bar! Buy a candy bar or be a real estate guru! The next chapter we go over repair requests. The last chapter to be shared on this blog you can find here.
Three days later, I called Steve to let him know I had received the repair amendment. I took a peak before I called him. I knew from experience with the couple that they would not be happy with the repair request. Before I sent it over to Steve, I wanted to remind him about three things to keep in mind about the repair amendment.
1.Repairs are a necessary evil part of the process – Steve groaned in frustration and said he knew this. He said he didn’t like being told what is wrong with his home. I reminded him that buyers don’t like being told that they home they are buying has issues. I could tell that Steve was already put out before he had even saw the repair request. I told Steve. “I realize this is your home that you have taken great care for years. It is best as a seller to keep an objective clear head about the process. I will be here during the process. Don’t be shy with me. If you want to get angry about a small repair you don’t think is worth your time, it is better to fuss and groan at me. It will help to get it off your chest. At the same time, don’t expect me to be a “yes” person. I will be candid with you about how you should respond to the request. Buyers do have the option to end the contract for any reason during the option period. Don’t give them a good reason to do so by being unreasonable in your response.” Silence on the other end of the phone, but Steve said he understood.
2.Repairs are negotiable – Steve said he remembered all too well that they were negotiable. I told Steve he had three options in how he can respond to a repair request. “You can accept the repairs as presented by the buyer. You can reject it out right and not do any repairs (not recommended!) Finally, you can respond with a counter offer, which is the one most often employed by sellers.” Steve said it all depends on the repairs being requested and how much they will cost him in time and money. I told him that I had already asked the buyer’s agent for some ideas on what repairs were important to the buyers, so we could look over each one to try to estimate costs. “Once you know all of this, you can make a reasonable decision on how to respond. One additional trick to keep in mind is that you can also offer financial considerations versus repairs. If you calculate repairs will cost $1000, you can offer the buyers this as an allowance or offer to reduce the sales price accordingly.: Steve muttered that he understood.
3.You can’t do the repairs yourself – I continued with Steve. “When I sold my own properties, I did a lot of the repairs myself to save money. This is no longer an option, at least in Texas, as the contract specifies that all repairs must be done by licensed individual in the trade. If no license is required, then the repairs must be made by someone who is in the business or trade of making the requested repairs. In addition, the repairs made must have a transferable warranty to the buyers so future work can be done on the repairs if required. It is best to keep this in mind as you are figuring the cost estimates. It is always going to be more expensive to get someone else to do it versus doing them yourself.”
Steve lost it at this point. He said that there must be something to overcome this restriction. After all, not every job requires an expert. I told him that we could request the buyer accept his repairs, but it would need to be part of the amendment, so the buyer could not hold it against Steve later for not using an expert tradesman. Steve said that is wanted he wanted to do. I sent the repair amendment over to Steve and reminded him that the option period was due to close in two days and we needed to be quick on our response, so the buyer does not get scared that you are not going to do any of the repairs. He called me the next morning. We discussed each repair and I was instructed to counter with three of the nine repairs listed in the amendment and he would do one of them. The buyers insisted on five of them but was fine if Steve did them since he showed good work on keeping the house in shape. The two parties signed the amendment with two hours left in the option period. I could literally hear Steve sigh with relief from across town.